Word: paye
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Dates: during 1960-1969
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LIABILITY Collecting More Than the Maximum When a person buys liability insurance, the company agrees to pay dam age awards against him - but only up to the amount specified in his policy...
Recently, however, state courts across the U.S. have ordered insurance companies to pay far more than the policy's face value. In one remarkable California case, a company that had issued a policy with a $10,000 limit was ordered to pay more than...
...divided. Example: an accident victim sues for $20,000, but offers to settle for the policy limit of $10,000. In that case, the company may have good reason to refuse the offer. A jury might find for the policyholder, so that the company would need to pay nothing at all, or the decision might be for a lower award, also saving money for the company. But even if the insured loses and the jury awards the full $20,000, the most that the company will have to shell out is still only the $10,000 stated in the policy...
...angry policyholder can answer why not: because he has to pay the extra $10,000, whereas, if the company had chosen to settle, he would have had to pay little or nothing...
...Simple Rule. In the California case, Security Insurance Co. of New Haven had refused to settle the claim of a tenant who had fallen through a faulty wooden staircase. The victim later developed a severe psychosis. The landlady, who had to pay up as a result of the insurance company's refusal, was forced to sell off her assets. She became indigent, eventually lost her health and attempted suicide. She sued Security, and the California Supreme Court finally upheld an award that covered the excess she had had to pay over the insurance limit, plus damages for the mental...